18 Oct 2013

Farmers closer to knowing cost of Ruataniwha water

8:54 pm on 18 October 2013

Central Hawke's Bay farmers will get a firmer indication of the cost of tapping into the much-debated Ruataniwha water storage and irrigation scheme late next month.

The Hawke's Bay Regional Council's investment company promoting the scheme has received close to 100 expressions of interest from farmers for water to irrigate 12,000 hectares, representing a mix of sheep and beef, cropping and dairy farming properties.

The proposed site of the $260 million Ruataniwha dam.

The proposed site of the $260 million Ruataniwha dam. Photo: RNZ

The project has the potential to irrigate 25,000-30,0000 hectares. A Board of Inquiry considering resource consents for the scheme and a district plan change will hold a hearing next month.

Two companies, a French-based contractor and a Spanish-New Zealand joint venture, have submitted competing bids to build the dam.

Council investment company commercial manager Duncan MacLeod says a clearer idea of what it will cost irrigators to buy water from the scheme will emerge once a decision is made around the end of November on which of the two companies will get the job. But he says that's only part of the process.

"Construction of the dam and the process around that is really simple, in a way," he says. "The more challenging aspect is the distribution network."

That was because they first had to establish where demand was in the catchment, and then design the distribution system off the back of that.

"... obviously there's no point building pipes to nowhere, and so we'll have to keep working through that over the next six months," Mr MacLeod says.

A decision on whether the scheme will proceed will be made by April, he says.

Hawke's Bay Federated Farmers president Will Foley says the price is the key for farmers but indications it will be within the range of the initial estimate of 22-25 cents per cubic metre of water.

"I think as time goes on, the perception is that level is okay. In comparison to other schemes, it's on the higher side but we need to make sure that we're comparing like with like schemes and in this case farmers don't have to have or put any capital up front to own or have ownership in the dam," Mr Foley says.

With other schemes, farmers tend to put in large amounts of capital up front to own the scheme and then have a cheaper per cubic metre price, he says.